Zomato turns profitable in 6 markets, including India

Zomato co-founders Pankaj Chaddah (left) and Deepinder Goyal. Photo: Ramesh Pathania/Mint

Zomato co-founders Pankaj Chaddah (left) and Deepinder Goyal. Photo: Ramesh Pathania/Mint

Restaurant search and review website Zomato Media Pvt. Ltd said on Monday that the company has reached operational profitability in six markets, including India.

Zomato has also turned operationally profitable in the United Arab Emirates, Lebanon, Qatar, the Philippines and Indonesia.

“We can now channelize the profits to grow faster and compete harder in countries where we see significant competition,” said Pankaj Chaddah, co-founder of Zomato. “It’s a great thing that we don’t fully depend on external funds to fuel all the experiments and initiatives that we have undertaken in India and elsewhere.”

The news comes at a time of growing concerns around business models of food tech start-ups and their ability to scale their businesses beyond metro cities. Gurgaon-based Zomato has been aggressively trying to cut spending and improve business dynamics in at least the last 6-10 months to achieve profitability.

“We have more than doubled our revenue year-on-year for the last few years, and we are going to post some great growth numbers this year as well. We are profitable in six of the 18 markets we are the market leaders in,” said Deepinder Goyal, co-founder and chief executive of Zomato.

Zomato, which makes money by charging a monthly subscription fee from restaurants, in January ventured into table bookings, a high-margin business to bring additional revenue.

Started in 2008 by Chaddah and Goyal, Zomato ventured into food-ordering in May after several new food tech companies started attracting strong investor interest.

The company today gets 22% of its traffic and 35% of its overall revenue from India. According to Zomato, its India business today gets over 10 million monthly unique visitors and serves over 15,000 orders a day at an average ticket price ofRs.575.

In the last three years, Zomato has expanded its operations to 23 countries, and claims to be the market leader in 18 of them. The company has made eight acquisitions outside of India, including Urbanspoon in January 2015 for $52 million.

“2015 has been a challenging year for food-tech, and the market has seen its fair share of correction in recent months. It takes discipline to maintain a focus on and work towards profitability, and we are proud of the Zomato team for getting here,” said Mohit Bhatnagar, managing director of Sequoia Capital India Advisors.

Last month, Zomato shut operations in four cities citing poor demand.

In October, the company cut 10% of its workforce.

“Zomato has emerged as one of the finest global consumer Internet businesses to have come out of India. They’ve grown to a position of dominance in most of the markets they operate in, and have scaled revenue with a known path to profit…,” said Sanjeev Bikhchandani, founder and executive vice-chairman, Info Edge India Ltd.

Zomato was valued at about $1 billion in September when it raised $60 million from Singapore’s Temasek Holdings Pte and existing investor Vy Capital. The firm has raised about $225 million since inception. It today faces stiff competition from Bengaluru-based Swiggy, which raised $35 million in January.


Hopscotch raises $13 million in a round led by Facebook co-founder Eduardo Saverin

The company raised $11 million in 2015.

The company raised $11 million in 2015.

Mumbai: Online baby clothes and products company Hit The Mark Inc., which owns and operates as Hopscotch.in, said on Monday that it has raised $13 million in a Series C round of funding led by Facebook co-founder Eduardo Saverin. Saverin Family Office will join the Hopscotch board and work closely with the management team.

The company raised $11 million in 2015.

The company, which was founded in 2012 by Rahul Anand and Lisa Kennedy, is looking to use the funds for its growth, hiring and expansion in technology. “I am very excited to support the team with this investment, and continue to be closely involved with building the company’s vision and strategy. Hopscotch is taking a customer focused approach and as a result seeing record high customer retention,” said Saverin in a statement.

The kids e-tail sector saw some activity last year. While Accel Partners and Tiger Global-backed baby care products e-tailer BabyOye was acquired by Mahindra Group in February last year, FirstCry (Brainbees Solutions Pvt. Ltd) raised $10 million in a round led by venture capital firm New Enterprise Associates (NEA) and San Francisco-based Valiant Capital in April.

While competitors like BabyOye and FirstCry have taken a combination of online and offline approach to growth, Hopscotch is betting big on being an online brand only. The company says its revenue has grown 700% year-on-year.


CS:GO Major Championship Bumps Prize Pool to $1 Million

CS:GO Major Championship Bumps Prize Pool to $1 MillionValve-sponsored competitive Counter-Strike: Global Offensive tournament, the CS:GO Major Championship has received a sizeable bump in its prize pool. Usually it was capped at $250,000 (approximately Rs. 17 crores). Now it’s four times that amount. Yes, the prize pool of the CS:GO Major Championship is now $1 million (around Rs. 68.57 crores) beginning with the tournament at MLG Columbus 2016.

(Also see: Counter-Strike: Global Offensive Update Insults Turkey, Causes AMD Video Cards to Crash)

“When we announced the first CS:GO Major Championship in 2013, we hoped the Majors would be rallying points for the community, tent-pole events that could draw new audiences and amplify the value of all events. Since then, the professional CS:GO community has been growing at an incredible rate,” a post on the official Counter-Strike blog reads.

“CS:GO tournaments are now among the largest esports events in the world, drawing global audiences of millions of viewers, filling massive venues, and garnering higher prize pools. Professional CS:GO has grown, and the CS:GO Major Championships are about to grow with it. We’re pleased to announce that beginning with MLG Columbus 2016, each CS:GO Major Championship prize pool will be $1,000,000.”

(Also see: Steam Isn’t the Cheapest Place to Buy Steam Games Anymore)

It’s a massive step up. And a welcome one at that considering that Valve’s other game – Dota 2 sees an ever-increasing prize pool year on year with its marquee event, The International.


HP Says to Accelerate Job Cuts by 2016

HP Says to Accelerate Job Cuts by 2016

HP Inc said it was accelerating its restructuring programme and now expects about 3,000 people will exit by the end of fiscal 2016 instead of over three years as it announced in September.

Then, Hewlett-Packard Co had said it expected to cut about 33,300 jobs over three years, of which up to 3,300 were to be cut in HP Inc. It said then that 1,200 people would leave the company by the end of 2016.

The restructuring will result in charges and associated cash payments of about $300 million (roughly Rs. 2,055 crores) in the current year, the company said.

“This move is basically HP Inc embracing the tough pricing environment and shifting their focus to building their portfolio,” says Shannon Cross, an analyst for Cross Research.

HP Inc, which houses former Hewlett-Packard Co’s legacy hardware business, reported a near 12 percent drop in quarterly revenue, as it struggles with weak demand for PCs and printers.

Revenue in the company’s personal systems business fell 13 percent in the first quarter ended Jan. 31, while it declined 17 percent in its printing division from a year earlier.

PC sales have been falling sharply worldwide, and the launch of Windows 10 has so far failed to rekindle demand.

Printer demand has been hurt as corporate customers cut printing costs and consumers shift to mobile devices.

The company, which is reporting results independently for the first time since being spun off from Hewlett-Packard Co, forecast adjusted profit of 35-40 cents per share for its second quarter ending April 30.

Analysts on average were expecting 39 cents, according to Thomson Reuters I/B/E/S.

HP Inc maintained its 2016 adjusted profit forecast at $1.59-$1.69 per share.

The company’s earnings from continuing operations fell to $650 million, or 36 cents per share, in the first quarter from $770 million, or 41 cents per share, a year earlier.

Revenue fell to $12.25 billion from $13.86 billion.

Analysts on average had expected earnings of 36 cents per share and revenue of $12.20 billion.

HP Inc’s shares were marginally lower at $10.75 in extended trading on Wednesday. They had fallen more than 13 percent since the spinoff in early November to Wednesday.

Hewlett-Packard Enterprise Co, also spun off from Hewlett-Packard Co, is expected to report results on March 3.